1. The Field of the Invention
The present invention relates to systems and methods for dynamically specifying a pertinent name associated with a merchant account. More particularly, the present invention relates to systems and methods for determining the identity of a business entity in a financial transaction based on the transmittal information conveyed during the transmission of the transaction information.
2. Background and Related Art
Financial cards come in a variety of different types from traditional credit cards and debit cards to stored value cards. Issuers and acquirers that are members of an association or jointly owned corporation make it possible for these types of financial cards to be used to make payments. The association is an entity that administers and promotes financial cards. Some associations promote one or more brands of financial cards. Issuers are usually financial institutions that issue cards to individuals or entities (businesses) that thereby become cardholders. Acquirers maintain relationships with merchants that enable the merchants to accept financial cards from cardholders.
Today, using a financial card in a transaction requires a person to establish a relationship with an issuer and become a cardholder. Becoming a cardholder is a process that is well known to a large number of people and many people receive solicitations to become cardholders almost every day. Generally, a person completes a simple application and provides the completed application to an issuer. In the case of an application for a credit card, the issuer examines the credit of the applicant, establishes a credit limit, and issues a card to the person. After the cardholder receives his or her card from the issuer, the cardholder can use his or her card to purchase goods and/or services as long as the merchant accepts that particular card.
After people become cardholders, they are able to use their cards in financial transactions to make payment. While people are able to use their cards to purchase goods/services, they are unable to accept cards as payment in similar transactions. The ability to accept cards as payment requires the person accepting the card to have a merchant account with an acquiring financial institution. Unfortunately, merchant accounts are only available to businesses that become merchants as defined by the association. To accept cards and become a merchant, the business must establish a relationship with an acquirer that enables the business to accept cards in the business's transactions. This is primarily accomplished through a merchant account that the acquirer establishes for the business that qualifies as a merchant.
To obtain a merchant account with an acquirer and become a merchant, the business is often asked to provide details regarding their business practices. The business is often required to describe the goods and services being sold as well as how the goods and services are delivered to customers. With this information, the acquirer assists the business to identify a card processing system that best serves the needs of the business.
One feature of a card processing system is to identify the business involved in each financial card transaction. Generally, the business can be identified by the name of the merchant account. The business is identified by associating the name on the merchant account with a particular transaction. Transaction data gathered and sent during a card transaction contains information identifying the merchant account to be credited.
The issuer also uses the name of the merchant account. When the issuer collects payment from the cardholder, the issuer provides the cardholder with a statement. The statement itemizes the cardholder's transactions and provides the name of the merchant account where payment was made. Providing the cardholder with the merchant account name for each transaction facilitates the financial card system because it helps the cardholder verify that the listed transactions are valid transactions and reduces the risk of fraud or error.
Some merchants, however, conduct business for more than one business entity. This type of business structure is common with businesses where the merchant is an individual sales representative who visits customers in their home or somewhere other than a business establishment. Since these merchants do not have an established place of business, these merchants have the liberty of acting on behalf of more than one business entity or for themselves.
In general, conventional merchant accounts are associated with only one merchant name. Merchants that enter into transactions on behalf of multiple business entities find it difficult for financial entities to provide a single merchant account name for a single merchant account. Since the merchant is involved in each transaction, regardless of which business entity they are acting on behalf of, the merchant name includes the name of the individual merchant. However, the business entity's name is usually more familiar to a purchaser than the merchant's name. Therefore, it is beneficial to include the business name on the cardholder's statement. Unfortunately, merchant accounts are not able to be associated with more than one merchant name or doing business as name.
For the merchant account to include the correct name of the business entity, multiple accounts must be established or the merchant account name must be specified. Having multiple accounts is undesirable because it requires additional work to underwrite and maintain the account. It is also economically prohibitive to have more than one account because of the associated fees and costs. Minimum fees, for example, are often charged whether the merchant account is used. While in some cases the merchant may be able to specify the correct business entity, relying on the merchant to specify the correct merchant account name creates the potential for error. The merchant may forget to include the business entity name or may specify the wrong name.
This problem is also evident in Point of Sale (POS) terminals. Some POS terminals have the ability to be configured for multiple merchant accounts. They do not, however, contemplate multiple merchant names for a particular merchant account. POS terminals in, for example, medical offices, are often used with multiple merchant accounts even though there is a single medical office.